Correlation Between 00108WAF7 and 50247WAB3
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By analyzing existing cross correlation between AEP TEX INC and LYB INTL FIN, you can compare the effects of market volatilities on 00108WAF7 and 50247WAB3 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 00108WAF7 with a short position of 50247WAB3. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and 50247WAB3.
Diversification Opportunities for 00108WAF7 and 50247WAB3
Good diversification
The 3 months correlation between 00108WAF7 and 50247WAB3 is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and LYB INTL FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LYB INTL FIN and 00108WAF7 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AEP TEX INC are associated (or correlated) with 50247WAB3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LYB INTL FIN has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and 50247WAB3 go up and down completely randomly.
Pair Corralation between 00108WAF7 and 50247WAB3
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 4.35 times more return on investment than 50247WAB3. However, 00108WAF7 is 4.35 times more volatile than LYB INTL FIN. It trades about 0.04 of its potential returns per unit of risk. LYB INTL FIN is currently generating about 0.0 per unit of risk. If you would invest 7,424 in AEP TEX INC on October 22, 2024 and sell it today you would earn a total of 244.00 from holding AEP TEX INC or generate 3.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 85.71% |
Values | Daily Returns |
AEP TEX INC vs. LYB INTL FIN
Performance |
Timeline |
AEP TEX INC |
LYB INTL FIN |
00108WAF7 and 50247WAB3 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 00108WAF7 and 50247WAB3
The main advantage of trading using opposite 00108WAF7 and 50247WAB3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, 50247WAB3 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 50247WAB3 will offset losses from the drop in 50247WAB3's long position.00108WAF7 vs. Sapiens International | 00108WAF7 vs. Griffon | 00108WAF7 vs. Park Ohio Holdings | 00108WAF7 vs. Emerson Electric |
50247WAB3 vs. U Haul Holding | 50247WAB3 vs. China Aircraft Leasing | 50247WAB3 vs. Herc Holdings | 50247WAB3 vs. AerCap Holdings NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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